FFVs Flourish in Sweden

The Swedish people take the environment and their need to reduce oil use seriously. That attitude is reflected in their use of flexible-fuel vehicles, which has increased from 717 in 2001 to more than 100,000 today.

By Eric Kroh | July 08, 2008

When Kjell Andersson, information director of the Swedish Bioenergy Association, is asked why Sweden has been so successful in adapting to ethanol, he tells the following story.

In the 1990s, the capital city of Stockholm, working with the Swedish Flexi-Fuel Buyers' Consortium, placed an order for 2,000 flexible-fuel vehicles (FFVs) for any car company that could produce them. The idea was to jump-start the FFV industry by offering guaranteed business to producers. The two big Swedish automobile companies, Volvo Car Corp. and Saab AB, declined the offer, as did other European automobile makers. "It was a hen and egg situation," Andersson says. "Someone has to start. The car companies say there aren't any ethanol filling stations, we won't build cars. The oil companies say, there aren't cars, we won't build filling stations."

Instead, Ford Motor Co. took them up on the offer, and was given the go-ahead to begin importing the FFV version of its Focus model. Ford was the first manufacturer to offer ethanol-powered vehicles on the European market. "They were alone on the market for many years," Andersson says. "That was 2001."

From 2001 to 2005, Ford sold more than 15,000 FFV Focus models in Sweden, commanding 80 percent of the eco-friendly car market, according to Ford. Rather than being seen as a failure on the part of Swedish car companies, though, the success of the Focus was seen as a victory for the people of Sweden, who were willing to do what it takes to reduce their dependence on oil, even if it meant giving business to a foreign car company, Andersson says. "It's better to do the right thing," he says.

Since then, FFVs have taken hold in Sweden in a big way. In 2001, 717 FFVs were on the road in Sweden, according to Sweden's BioAlcohol Fuel Foundation, an organization of biofuels producers and transportation companies. That number passed 100,000 earlier this year.

More FFVs, Means More E85 The number of gas stations offering E85 has also risen dramatically, from the first pump in 1995 to more than 1,200 today, according to BAFF. By comparison, there are about 1,500 E85 filling stations in the United States for the 6 million FFVs on the road, according to the National Ethanol Vehicle Coalition.

The European Union has a renewable fuels mandate of replacing 5.75 percent of gas and diesel with biofuels by 2010, and has proposed a mandate of 10 percent by 2020.
But the Swedish approach to using biofuels to reduce dependence on oil relies on using incentives to change the direction of fuel consumption, rather than setting unattainable mandates or benchmarks, Andersson says. It is a natural outgrowth of Sweden's familiarity with renewable fuels such as biomass, which Swedes have long used to heat their homes.

"It's a long-term strategy," Anderson says. We have worked with bioenergy in other fields—for heating, electricity—for a very long period to reduce the use of fossil fuels in other sectors. To be able to go on, we need to do something about transportation It's a matter of political will, to put in the right incentives for public procurement."

In 2005, the Swedish government assembled a commission of leaders in government, industry and conservation. It included such dignitaries as Göran Persson, the prime minister of Sweden at the time, and Leif Johansson, the president and chief executive officer of Volvo, the renowned Swedish transportation company based in Gothenburg.

The commission set an ambitious goal for Sweden: Figure out how to dramatically reduce dependence on oil and eliminate oil imports by 2020. To do so, the Commission on Oil Independence thought it necessary to reduce the use of oil for transportation by 40 percent to 50 percent by that year.

A group of aggressive incentives has Sweden well on its way to achieving that goal, says Per Carstedt, chief executive officer of Svensk Etanolkemi AB (Sekab), one of Europe's largest producers and distributors of ethanol.

Because of tax breaks, E85 fuel at the pump in Sweden typically costs about 30 percent less than gasoline. Since the energy content of ethanol is less than that of gasoline that means it costs about the same for consumers to drive a certain distance whether they're powered by E85 or gas.

In addition, the government provides other incentives for FFV owners, including a $1,800 bonus to purchasers of FFVs; a 20 percent tax reduction for flexible-fuel company cars; lower vehicle insurance; exemption from congestion charges in Stockholm; and even free parking spaces in all but one of Sweden's 35 largest cities.

It is because of incentives like these that ethanol has been able to make such a large headway into Sweden's fuel supply, Carstedt says. It should be no problem to significantly reduce the use of fossil fuels in passenger cars. "The first three months of this year, roughly 25 percent of cars purchased are flex-fuel," Carstedt says If you stop that trend now, continue having 25 percent of new cars be flex-fuel, you reduce roughly 30 percent to 35 percent of (overall) gasoline consumption. The more difficult area is heavy traffic."

From Cars to TrucksTo meet the goal of reducing overall fossil fuel consumption for transportation, it will be necessary to do for trucks and other heavy vehicles what Sweden has done for passenger cars, he says. Sweden already has about 600 buses that run on pure ethanol, Carstedt says. The engine they use is made by Stockholm-based Scania AB, the world's leading producer of heavy trucks and buses.

Sekab and Scania are working together to make trucks that have the newest generation of the ethanol engine that has been used in Sweden's buses for 20 years. A lack of places to fuel up on pure ethanol has impeded the use of the engines in anything other than vehicles that are able to return to the same place every night, such as buses. It becomes more complicated for trucks and other vehicles that travel long distances, and therefore need filling stations along the way.

But there are plans to have a skeleton system of 10 pure ethanol filling stations along major routes in Sweden by 2010. These pumps will feed pure Sekab ethanol to a fleet of Scania trucks, which will be sold for the first time later this year.

The ethanol engines operate on the same principle as diesel engines, says Hans-Ake Danielsson, a spokesman for Scania. The main differences are that the combustion pressure is not as high for the ethanol engine, and the ethanol fuel needs to be blended with an ignition enhancer.

The ethanol engine has the same efficiency as an engine running on diesel—up to 44 percent, according to Scania. But the ethanol engine offers a reduction of up to 90 percent of carbon dioxide emissions compared with diesel when sugarcane ethanol is used for fuel. The 9-liter engine has an output of 270 horsepower and a torque of 1,200 newton meters (885 foot-pounds), according to Scania.

The ethanol-fueled trucks will be available throughout Europe, Danielsson says. Scania does not operate in the North American market for logistical reasons.

The ethanol that will power these trucks—and Sweden's other flex-fuel automobiles—will for the most part be imported. Sweden only produced about 18.5 million gallons of ethanol in 2007, according to the European Bioethanol Fuel Association. This is roughly the same amount of ethanol the country produced in 2004, and half of what it made in 2006.

But Sweden also consumed nearly 100 million gallons of ethanol in 2007, meaning the country imported about 80 million gallons of ethanol that year. Most of this ethanol came from Brazil. In fact, Sweden is the largest importer of Brazilian ethanol in Europe.

A low import tariff makes Brazilian ethanol attractive to buyers. Swedish officials would like to abolish the import tax, but have been met with resistance from the European Union, which would like Sweden to increase tariffs, Andersson says.

On the Production EndSweden is working on developing other sources of ethanol as well. The country has a substantial paper pulp industry. Black liquor, a byproduct of pulp production, is a promising source of biofuels. In addition, Sweden is collaborating with the African countries of Ghana, Tanzani and Mozambique to develop ethanol industries there.

Ghanain company Northern Sugar Resources Ltd. announced it will cooperate with Sweden to grow sugarcane to supply a 40 MMgy ethanol plant. The plant will be built by Brazilian company Constran S/A, and Skania has committed to buying the first 10 years of the plant's ethanol production, though it will not operate at full capacity when it begins producing.

Sweden's reliance on foreign ethanol could presage what's in store for the American ethanol industry, says Wally Tyner, agricultural economist at Purdue University. Renewable fuels mandates passed by Congress last year cap production of corn ethanol in the United States at 15 billion gallons per year by 2020, while requiring 36 billion gallons of renewable fuels to be produced that year. The most likely contender to fill out most of the gap is cellulosic ethanol, but the domestic industry will likely not be able to fulfill that demand, Tyner says. "Right now we're doing fine meeting the renewable fuels standard," he says. "Down the road we won't be able to unless we start importing more ethanol."

One way to encourage ethanol imports is to reduce the import tax, Tyner says. The Farm Bill passed by Congress in May extends the import duty through 2010, but Tyner thinks Congress will revisit the issue in 2009 and consider reducing the tax if they are serious about meeting ethanol mandates.

Nobody can accuse Sweden of not being serious about addressing climate change, says Mattias Goldmann, spokesman for the Swedish Association of Green Motorists. Why are Swedes so environmentally conscious? Goldmann says it is because the effects of climate change are much more obvious in Sweden than other places. "Here in Stockholm, we technically didn't have a winter at all this year," he says. "Our ice skates are just rusting. My daughter was complaining that she couldn't go sledding at all. That's the number one reason."

Goldmann also says Sweden has something to prove. Swedish car manufacturers, such as Volvo and Saab, have historically produced larger cars that guzzle more fuel than other European models. Sweden has "by far the highest fuel consumption at fleet level of any European country," Goldmann says. "We have a lot of homework to do."

This motivation, along with effective financial incentives and the Swedes' love for nature, has propelled Sweden to a leadership role in the European Union with regard to renewable fuels, Goldmann says. "We're a country of nature-going people who really care about the environment," he says. "In Sweden we're really starting to learn now."

Eric Kroh is a Chicago-based journalist who writes and creates multimedia content about biofuels and the environment.